THE SOLUTIONS LAB
Mark Tighe
Challenge: R&D TAX RELIEF
Why are so many small and medium-sized businesses failing to claim what’s rightfully theirs?
L
et’s be honest, tax relief isn’t the most exciting issue that SMEs face. However, the reality is that, done
well, it can be the difference between a firm’s success, stagnation or even failure. Tax relief comes in many forms but, for now, I want to concentrate on a lesser known version set up by the government to stimulate innovation across the economy. This is research & development (R&D) tax relief and is applicable to businesses of any size which spends time and money developing a new product, process or service. Through extensive research across
the UK, we’ve identified that nearly eight in 10 SMEs are likely to be eligible for R&D tax relief but, incredibly, up to 55% of those aren’t claiming. If we conservatively assume that two thirds of Britain’s 5.7 million SMEs are actively trading, this translates to approximately 1.6 million small businesses which are missing out on this valuable relief. In our experience at Catax, the typical R&D claim is worth £46,000 – so the total amount that small businesses could be missing out on equates to £74 billion. The question that needs to be
addressed is - why are so many small and medium-sized businesses failing to claim what’s rightfully theirs? First, there continues to be a lack of
awareness around the very existence of R&D tax relief. It is not particularly well publicised by the government or HMRC and, as with most areas of taxation, some of the detail is quite complex. Second, many believe the relief is
limited to scientific firms, particularly those in the pharmaceutical industry, meaning SMEs fail to claim because
www.smeweb.com SME 31
they don’t think they qualify. This is just not the case – SMEs in every sector are innovating. For example, we’ve recently processed claims from restaurants developing new dishes, manufacturers coming up with more efficient ways to put jam into donuts, and an engineering firm developing a new counter terror bollard. It’s also worth mentioning that the R&D doesn’t even have to be successful to qualify – all that matters is that time or money has been spent on a new product, process or service. Finally, there is a misconception that claiming is time consuming and
expensive. Most good R&D firms take a commission from the successful claim and engage their own in-house expertise to handle the case from start to finish. SMEs in every industry need to
innovate to remain competitive and relevant. The government knows how important R&D is to the UK economy, particularly with Brexit getting ever closer. R&D tax relief is there to be claimed and I’ll leave you with this question. Can your SME afford miss out?
Mark Tighe is CEO of Catax
catax.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36
